Romania approves $108 million in aid for Nokian tire plant

BUCHAREST, Romania—The Romanian government has agreed to provide $108 million in state aid to Nokian Tyres P.L.C. for the construction of a greenfield tire plant in the country.

A government announcement, issued Jan. 18, indicated that the requested aid would be provided over a five-year period through 2028, subject to authorization by the European Commission.

Finnish tire maker Nokian Tyres disclosed plans last November to build the "world's first zero-CO2 emissions" tire plant in Romania. The $650 million project will be located in the northwestern town of Oradea, Bihor county, near the Hungarian border.

According to Nokian Tyres, construction is scheduled to begin in early 2023, with the first tires expected to be produced in the second half of 2024.

Part of Nokian's new production strategy following its exit from Russia, the Romanian plant has a planned capacity of 6 million tires per year, with potential for future expansion.

Once in production, the plant will become the sixth tire factory in Romania and fifth operated by a western European company. Others active in Romania are Continental A.G. (passenger tires in Timisoara); Group Michelin (passenger tires in Victoria and commercial tires in Zalau); and Pirelli Tyre (passenger tires in Slatina). In addition, Eurotire Inc. has an OTR tire plant in Drobeta.

Nokian also recently approved a $174 million investment in its Dayton, Tenn., factory to expand capacity and add warehousing at the site, and struck an off-take production deal with China's Qingdao Sentury Tire Co. Ltd. for the supply of Nokian-brand tires for sale in central Europe.